References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as a “Seller.”

By accepting the premise that the servicing data and documents were transferred you are accepting that the transferor had the correct data and documents and that the designated servicer is actually in position to represent the accounting records of the party whose name was used to initiate the foreclosure.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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As Reynaldo Reyes of Deutsche Bank said in deposition and in recorded interviews, the entire structure and actual events are “counterintuitive.” The banks count on that for good reason. Most lawyers and almost all homeowners assume that at least some of what the banks are saying is true. In fact, nearly everything they say, write or produce as “business records” is a fabrication. But homeowners, lawyers and judges buy it as though it was solid gold.

In defending homeowners from foreclosure, lawyers who win more cases than they lose do so because of their willingness to believe that the entire thing is a hoax. Their withering cross examination and use of discovery reveals the complete absence of any corroborating evidence that would be admissible in court.

Even the most “biased” judges will concede that the case for foreclosure has not been made and they rule for the homeowner. But this only happens if the lawyer takes the opposition to task.

Chase did not acquire loans from WAMU and WAMU did not acquire loans from Long Beach etc. At the time of the claimed “acquisition” those loans were long gone, having been funded or purchased by one of the big 4 investment banks, directly or indirectly (through intermediate investment banks or simple cham conduit fictitious names or entities). In fact the ONLY time that the actual debt was clearly owned by anyone was, at best, a 30 day period during which the investment bank had the debt on its balance sheet as an asset.

So all sales from any seller other than one of the investment banks is a ruse. And there are no references to sales by the investment banks because that would be admitting and accepting potential liability for lending and servicing violations. It would also lead to revelations about how many times and in how many pieces the debt was effectively sold to how many investors who were NOT limited to those who had advanced money to the investment bank for shares in a nonexistent trust that never owned anything and never transacted any business.

Similarly the boarding process is a hoax. There is generally no actual transfer of servicing even with the largest “servicers.” They are all using a central platform on which data is kept, maintained, managed and manipulated by a third party who is kept concealed using employees who are neither bonded nor trained in maintaining accurate records nor protecting private data.

There is no transfer of servicing data. There is no “boarding” and no “audit.” In order to keep up the musical chairs game in which homeowners and lawyers are equally flummoxed, the big investment banks periodically change the designation of servicers and simply rotate the names, giving each one the login and password to enter the central system (usually at a server maintained in Jacksonville, Florida).

BOTTOM LINE: If you accept the premises advanced by the lawyers for the banks you will almost always lose. If you don’t and you aggressively pound on the legal foundation for the evidence they are attempting to use in court the chances of winning arise above 50% and with some lawyers, above 65%.

To be successful there are some attitudes of the defense lawyer that are necessary.

The first is that they must believe or be willing to believe that their client deserves to win. A lawyer who thinks that the client is only entitled to his/her time or a delay of the “inevitable” will never, ever win.

The second is that they must believe or be willing to believe that the entire scheme of lending, servicing and foreclosure is a hoax. Each word and each document that a lawyer assumes to be valid, authentic and not fabricated is a step toward defeat.

The third is that the lawyer must fight to reveal the gaps, consistencies and insufficiencies of the evidence and not to prove that this is the greatest economic crime in human history. All trials are won and lost based on evidence. The burden is always on the foreclosing party or the apparent successors to the foreclosing party to prove that title properly passed.

Fourth is arguably the most important and the one that is most overlooked. The lawyer must believe or be willing to believe that the foreclosure was not initiated on behalf of any party who could reasonably described as a creditor or owner of the debt. The existence of the trust, the presence of a real trust in any transaction in which a loan was purchased, sold or settled to a trustee, and the various permutations of strategies employed by the banks are not mere technical points. They are a coverup for the fact that no creditor and no owner of the debt ever receives any benefit from a successful foreclosure of the property.

Yes it is counterintuitive. You are meant to think otherwise and the banks are counting on that with you, your lawyer and the judge. But just because something is counterintuitive doesn’t mean that it isn’t true.

It’s complicated. But as this article proudly states, Black Knight is a leading “fintech” company, meaning that it handles the technology and software for “servicing” loans in default. This is the same company that, through DOCX literally published a menu of prices for fabrication and robosigning documents several years back.

My point has been that based upon my investigations, there is no loan boarding. It is a complete fiction. This is hub and spoke management. The hub is Black Knight. “Boarding” actually consists of changing the user name and password, and perhaps not even that. So discovery should include inquiries as to whether Black Knight (or others like it) are the ones involved in the so-called transfer of data.

Consider this quote from the article: “MSP is a comprehensive, end-to-end system that encompasses all aspects of servicing – from loan boarding to default – for first mortgages and home equity loans.” (e.s.)

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They are hiding in plain sight comfortable in the knowledge that practically nobody will understand what they are really doing. This is “servicing” for the servicers. Not for the trust, not for the investors, not for the beneficiaries (if there are any), not for the obligee of the debt owed by the homeowner, not for anyone except themselves.

The naming of a trust as beneficiary under a deed of trust or mortgagee under a mortgage is in actuality the underwriter of RMBS doing business as the name of the trust, — which is a name of a presumed entity that in fact does not exist. In fact no transaction in the name of the trust occurred in which the trust paid money for any debt, note or mortgage. Thus no proceeds from the foreclosure go to the trust. Just ask.

The changing of servicers is merely a game to set up more layers and more curtains with the goal of increasing opacity. In actuality the servicers are merely pretenders acting under orders of the underwriter for the sale of fake bonds and promises issued by a “Trust” that neither exists nor receives the proceeds of sale of securities issued in its name.

Practice Hint — the issue is always legal standing: QUESTION FOR CROSS EXAMINATION: Who will receive the proceeds of liquidation of the property after foreclosure sale? HINT: IT CAN’T BE THE TRUST BECAUSE IT DOESN’T EVEN HAVE BANK ACCOUNT. Will the trust receive the proceeds? Will the beneficiaries receive the proceeds? Will the Trustee receive the proceeds? Will the Master Servicer receive the proceeds? How will the trust or the beneficiaries receive any money from the proceeds of liquidation of the property?

It’s only when you do the work — burrowing into all the data that the truth emerges. From many prior cases it has been obvious that the “boarding process” was a ruse. It was cover for the real parties who were manipulating data to suit their own needs contrary to their duties to the alleged investors and borrowers.

954-451-1230 or 202-838-6345. Ask for a Consult. You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

For years I have been saying and writing about the fact that the apparent servicer actually does nothing. Ocwen’s source of data capture and maintenance has been Altisource and now is supposedly being transferred to Black Knight, which we all remember is name change from LPS, who won fame by fabricating documents through its subsidiary or division, DOCX.

My educated guess is that Altisource was never the actual IT provider using the trade name “RealServicing.” It was always LPS n/k/a Black Knight and that is who is the hub in a wheel and spoke infrastructure designed to create the illusion of normal loan servicing.

Changes in servicing announced by one party or another would therefore have been just another change in musical chairs — where the names changes but the actual functions always stayed in the same place, which is why there were so many errors revealed when the REALServing platform was accessed from time to time. It reminds me when I studied auditing in my MBA program where the joke was revealed about French bookkeeping — one set for myself, one for my partner and the third for the government (and possibly a fourth for the spouse).

So when you have a witness from Ocwen who says that Ocwen “Boarded” the data or claims that the business records are those maintained by Ocwen on an IT platform controlled by Ocwen the answer is “not so fast.” As I have found in dozens of cases, the witness is unable to answer obvious questions that should have obvious answers. Follow up in your questioning and you might strike gold — once you plan out your cross examination of the robo-witness.

Altisource was under investigation by the CFPB, but the investigation was ended without charges. That investigation was “focused on the REALServicing platform and certain other technology services provided to Ocwen, including claims related to the features, functioning and support of such technology.”

The CFPB, in its lawsuit against Ocwen, claimed that REALServicing, the system Ocwen used to process and apply borrower payments, communicate payment information to borrowers, and maintain loan balance information, was riddled with errors and technologically deficient.

Over the last several months, Ocwen has reached settlements with nearly all of the states that brought regulatory action, and each of those settlements stipulated that Ocwen develop a plan to move away from REALServicing.

So the obvious take-away is that REALServicing was neither real nor a reliable basis to perform service. And that means that Ocwen’s claims to strict “boarding” of loans could not possibly be true.

But if you look deeper, you find that Altisource was not being paid or not being paid enough to justify the service. This enhances my argument that they were only a conduit for data that was at all times controlled by LPS n/k/a Black Knight.

The fine, assessed by the Federal Reserve Board, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, satisfies a provision of a previous consent order against Lender Processing Services. The fine will be paid to the U.S. Treasury.

The problem here is obvious: How can the FED, FDIC, and OCC fine the perpetrators of fraud in the courts without also revealing their administrative finding that the transactions were nonexistent and that the foreclosures were without basis?

The second problem is the obvious unasked and unanswered question: why was it necessary to resort to fraud and forgery if the base transactions (the originations) were true and valid?

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see http://www.nationalmortgagenews.com/news/compliance-regulation/servicelink-fined-65m-for-lps-robo-signing-activities-1095562-1.html

LPS had faced accusations for a number of years that the company and its subsidiaries fraudulently signed legal documents used in foreclosure proceedings. Fidelity National acquired LPS in 2014, and the company’s business was split between ServiceLink and Black Knight Financial Services, which is shielded from a fine through an agreement with ServiceLink.

Before being bought by Fidelity National, LPS reached a $127 million settlement with state regulators and paid $35 million to settle a Justice Department inquiry.

Fine related to 2011’s industry-wide foreclosure settlement

In 2011, Lender Processing Services was part of a massive settlement with the government over industry-wide foreclosure misconduct that occurred after the housing crash.

That settlement stemmed from document missteps in the third-party foreclosure process at some very large banks and mortgage servicers in the aftermath of the subprime crisis.

The settlement also included names like Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup.

While those names stuck around, LPS eventually disappeared. LPS’ former parent, Fidelity National Financial, bought up the company and merged it with another subsidiary, ServiceLink Holdings, and formed Black Knight Financial Services.

On Tuesday, the ghost of LPS came back to haunt ServiceLink and Black Knight, as the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corp. announced that they are fining ServiceLink $65 million for the “improper actions” of LPS that contributed to that 2011 settlement.

A release from the government agencies is scant on details that led to the fine.

The penalty assessed by the three federal banking agencies–the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency–against ServiceLink Holdings satisfied the document review provision of the previous enforcement action.

The accompanying consent order, which can be read here, references the history of LPS, and how the terms of the original consent order transferred as LPS changed hands and eventually merged.

The new consent order states that on Jan. 17, 2017, the board of managers of ServiceLink authorized the company’s chief compliance officer, Paul Perez, to enter into the amended consent order and agree to the fine.

The agencies say that LPS will send the $65 million fine to the Department of the Treasury.

The agencies also say that they will continue to monitor the ServiceLink’s compliance with other provisions of the original and amended consent order.

HousingWire attempted to contact Fidelity National, ServiceLink, and Black Knight for comment on the fine, but as of publication time, none of the companies had responded.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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The Florida Supreme Court decision in Bartram reinforces the absurd — that after losing in trial court, the pretender lender can sue over and over again for “new defaults.” The court has re-written the alleged “loan contract” to mean that a loss in court means that their acceleration of the entire loan becomes de-accelerated, meaning that acceleration is merely an option hanging in the wind that doesn’t really mean anything. The decision might have consequences when the same logic is applied to other actions taken pursuant to contract. The decision on acceleration is essentially this: If the banks do it, it doesn’t count.

*

But two things remain outstanding, one of which the court mentioned in its opinion. Why did the Plaintiff lose in its “standard foreclosure”? The issues that were litigated as to the money and/or documentary trail have been litigated and are subject to res judicata. The Plaintiff, if it is the same Plaintiff, is barred from relitigating them.

*

If Plaintiff failed to prove ownership of the loan and was using fabricated void assignments and endorsements, the lifting of the statute of limitations should not help them in attempting to bring future litigation. Many other such issues were undoubtedly raised in the original case. The Plaintiff would be forced to argue that while the issues were raised, they were not actually litigated and a judgment was not entered based upon those issues.

*

The Florida Supremes took away the Statute of Limitations, up to a point (see below) but gave us the right remedy — res judicata. Even if a new Plaintiff appears, the questions remain as to how the alleged loan papers got to them remain open, as well as whether the paper represented any actual loan contract absent an actual lender.

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And then there are the logistics that I don’t think were considered in its decision. According to the Bartram decision the act of acceleration vanishes if the Plaintiff loses. The statute of limitations does apply for past due payments that are more than 5 years old. That means, starting with the date of the lawsuit (not the demand), you count back 5 years and all payments due before that are barred by the SOL.

*

So if a Plaintiff loses the foreclosure, it can bring the action again based upon missed payments that were due within the SOL period. Of course if the Defendant won because the Plaintiff had no right or authority to collect on the DEBT, the action should be barred by res judicata. But putting that issue aside, there are other problems.

*

“Servicing” of a designated “loan account” is actually done by multiple IT platforms. The one used for foreclosure comes out of LPS/Black Knight in Jacksonville, Florida. This is the entity that fabricates documents and business records for foreclosure. It is not the the actual system used for servicing that deals in reality with the alleged borrower and accepts payments and posts them. It is incomplete. This system intentionally does not have all the documents and all the “business records” relating to the loan. For example there is no document or report that shows who was and probably still is receiving payments as though the loan were performing perfectly.

*

The decision on when and if to foreclose is always performed by LPS/Black Knight in order to prevent multiple servicers, trustees, banks and “lenders” from suing on the same loan, which has happened in the past. LPS assigns the loan to a specific party who is then named by Plaintiff. And LPS creates all the fabricated paperwork to make it look like that party is the right Plaintiff and that the business records produced by LPS can be presented as the business records of the party whose name was rented for the purpose of foreclosure. It is LPS documents that are produced in court, not the records of the named Plaintiff.

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So here is a sample simple scenario that will illustrate the logistical problem created by the Florida Supremes: LPS issues a notice of default letter naming the claimant as XYZ, as trustee for XYZ series 2006-19B Pass Through Trust Certificates. Previously XYZ lost the foreclosure action by failing to prove that it had any relationship with the loan. The Notice of Default and right to reinstate issued by LPS on behalf of XYZ must be for payment that was within the SOL. This action of course waives the payments, fees etc that are barred by the SOL. It also assumes that the date of the letter AND THE LAWSUIT will be within the SOL period. So for example, if the last payment was on December 1, 2006 and the letter refers to a missed payment starting with January 1, 2012, the letter is proper. But if suit is not commenced until January 2, 2017, the letter is defective and the lawsuit is barred by the SOL. Further the doctrine of res judicata bars any cause of action that was litigated previously.

*

All of this leads to a court determination of what issues were previously raised, when they were raised and whether the Final Judgment in favor of the homeowner means anything.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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For years the banks having been gradually ramping up a PR campaign that carries the message: the foreclosure crisis is over. “Institutions” like Black Knight (formerly known as the infamous Lender Processing Services —LPS) have been issuing statements that foreclosures are essentially over. The newest round of these false pronouncements is that foreclosures have sunk to a 9 year low.

The truth is more nuanced and “counter-intuitive” as Reynaldo Reyes, VP of Deutsch Bank “asset management” said many years ago. What the banks have done (using LPS/Black Knight) is play Wackamo with the states and counties. They ramp up foreclosures to an all time high and then switch to another county. Then the report is that the county with the all time high is now declining — because the banks have moved on to another county or state.

After the decline, they come back again and ramp it back up, sometimes stopping short of another all time high.

The facts are that there have been some 9 million foreclosures since the mortgage crisis began and there will be at least another 6 million foreclosures under cover of what is being reported as a crisis that is over. There are hundreds of thousands of foreclosures that were put on hold in cases where the homeowner put up a fight. Some of them are over ten years old — and courts, rather than dismissing them for lack of prosecution or adequate prosecution have (a) let them continue and (b) blamed the homeowner for the delays. Those cases are also coming to a head now and the banks are starting to show losses in court that were never reported before because they were only pursuing cases that were uncontested.

The truth is that the banks were playing the odds. The number of homeowners who put up a fight is only around 4-6%. By putting the contested foreclosures on hold, the banks were able to get millions of fraudulent foreclosures completed at a rate of 100%. Out of the contested ones, they still have the advantage much there record of success is much lower and getting lower every day as courts wake up to the fact that the banks are not being truthful in court nor with borrowers.

The soft underbelly is that the banks were not truthful with investors, from whom they essentially stole the money that was advanced for the purchase of mortgage backed securities that were issued by empty trusts.

PRACTICE HINT: There are three basic classifications of foreclosures into which every foreclosure falls.

Foreclosures without “issues.”

Foreclosures with factual issues

Foreclosures with procedural issues.

The first two can be won and should be won 100% of the time (speaking of loans in which multiple “transfers” and claims of securitization were made). The third one can be more challenging because either the pro se litigant or an attorney made admissions or already missed deadlines or otherwise failed to raise and press appropriate defenses.

The result of winning is an involuntary or voluntary dismissal when you win, but then you have the statute of limitations to deal with when they come back and sue again on more fraudulent paperwork. Attorney fees are generally awarded as long as you included the demand in the filings for the homeowner.

By foreclosures without issues I mean an apparent “default:” that the homeowner did stop making payments before the delinquency or default letter. These cases can only be won by good trial practice: timely proper objections, watching what evidence comes in and well-planned cross examination (which means good trial preparation). If you do the work your chances of winning at trial level or appeal, if necessary are very good.

By foreclosures with factual issues I mean situations in which the “servicer” created the illusion of a default by negligently or intentionally posting payments to the wrong ledger. This includes lump sum payments for reinstatement, insurance and other matters. The “borrower” never defaulted even if the note and mortgage were valid and even if the assignments were valid. The result is dismissal usually without prejudice. But if you also show that they were lying about the transfer to the trust or other foreclosing party, the case could be dismissed with prejudice and even with sanctions.

By foreclosures with procedural issues I mean situations in which procedural errors are present that require leniency of the court to correct them in order to properly defend. This usually occurs when pro se (aka pro per) litigants attempt to represent themselves because they think they have found some magic bullet. 95% of such cases are lost thus skewing the overall percentage of wins and losses for homeowners who put up a fight.

No case falls 100% into any specific category but each case can be generally categorized using the above analysis.

In all cases the homeowners’ attorney should make every effort to destroy the case asserted by the foreclosing party through vigorous and timely objections and brutal cross examination. Depending upon the rulings on objections and motions to strike testimony or documentary evidence, the defense should rest if there are no factual issues to present. This is especially true in cases without issues. If you don’t have the defense of payment or that the demand for reinstatement was inaccurate, there is nothing to present by the homeowner except for attempts at prejudicial comments about the lawyers and the servicers etc.

In a recent (August, 2016) case I had “without issues”, Patrick Giunta and I surprised the opposition by resting at the conclusion of the bank’s case. In nonjudicial states this is not so easy to do procedurally although it is possible in isolated instances. By resting at the conclusion of the bank’s case in a judicial foreclosure, the judge is forced to consider whether the evidence on the record supports a judgment for the plaintiff. Some judges will rule for the bank by the seat of their pants.

But by using objections vigorously, we had preserved multiple issues on appeal — namely we had excluded many pieces of evidence that were vital to the Plaintiff’s case. We were fortunate to have a judge that was serious about his job of being a judge. Like a jury would do, the judge took the case, the filings and the evidence into Chambers and read every page. He concluded that there were fatally defective elements and missing elements in the Plaintiff’s case and announced judgment for the homeowner.

In the final analysis the issue is always tacitly or explicitly legal and procedural standing. And one thing to keep in mind is that trial judges are not entirely persuaded by legal argument. But they ARE persuaded by facts admitted into evidence and facts excluded from evidence.

On a final note, I want remind practitioners that the admission of an objectionable document into evidence does two things: (1) it raises an issue for appeal and (2) it opens the door to challenge the probity of the evidence admitted. Once a document is admitted into evidence, it is in — in its entirety and for all purposes and for all parties.

For example when the PSA is admitted into evidence, make sure you have examined it and raise issues on cross examination as to whether it was signed, whether the exhibits were complete etc. Of course the main exhibit is the Mortgage Loan Schedule (MLS) which never contained real loans even where the PSA was complete and in many cases has no actual MLS exhibit, thus defeating the assertion that the Trust ever acquired any loan much less the loan of your client.

What we have here is what I dubbed in 2008 “A holographic image of an empty paper bag.”

The farce of securitization continues every day. In the savings and loan crisis of the 1980’s more than 800 bankers were jailed. This time only one person was jailed and she is about to be set free. Despite the revelations of illegal and fraudulent practices by banks acting in multiple roles as REMIC Trusts, Trustees, Master Servicers, and attorneys in fact, despite the fact that the money for loans was converted by those banks and covered up with a trail of paper that was garbage, despite the wholesale gutting of investors and homeowners alike, this appears to be the end of criminal prosecution even as the fraud continues.

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see http://www.vice.com/read/the-only-person-jailed-for-the-foreclosure-crisis-will-soon-go-free

The only thing they continue to get wrong is the presumption that the bank conduct was the result of negligence. There was no negligence. All the acts were the components of a carefully constructed criminal enterprise. And that is why 9 lawyers who were tasked with writing the documents for “securitization” quit. They refused to take part in what they called a criminal enterprise.

The truth is they rented the name of Linda Green to be used on tens of thousands of documents in order to distance the perpetrators from the actual fraud. This practice of “rent-a-name” is mirrored in the role of “Trustees” for “REMIC Trusts” that never conducted business, “Master Servicers”, “Subservicers” and others.

In a case I won last week with Patrick Giunta, a state court judge laid out the discrepancies and absence of any connection between the “evidence” and the myriad of companies meant to complicate the relationships such that piercing through the veil of fraud would be nearly impossible. But a very persistent Judge did it anyway — after painstakingly going through the documents and other evidence, while we waited nearly 2 hours for his decision.

Watch for my article on this when the case has been completed. Spoiler alert: Look carefully at the PSA on exhibit “A” and think about what was required to tie in the “MLS” (Mortgage Loan Schedule) with the PSA. The robo-witness was at best mistaken when he testified that the MLS, bearing no markings of any kind as to where it came from, was Exhibit “A” to the PSA “Trust Instrument.”And the presentation of the MLS was in direct conflict with what was written on “Exhibit “A”. What we have here is what I dubbed in 2008 “A holographic image of an empty paper bag.”

Here are some excerpts from the VICE article:

Brown was CEO of DocX, the third-party document-processing company that engineered the production of some 2 million fictitious mortgage assignments, often forged by people whose name didn’t match their signature, as a recent VICE investigation documented. These assignments were used as evidence in foreclosure cases nationwide beginning in the mid 2000s, leading to an untold number of people being ejected from their houses. Some 9 million Americans have surrendered their homes to banks since 2006, according to the Wall Street Journal, and the case that netted Lorraine Brown added to the evidence pile suggesting much of that misery was based on fraud.

Linda Green, a former shipping clerk for an auto-parts store, signed as the vice president of at least 20 other financial institutions, according to records compiled by Lynn Szymoniak, a whistleblower who wrote the fraud complaint that triggered the Jacksonville FBI investigation. But Green’s signatures all featured different styles of handwriting, because various people in the office wrote her signature on DocX mortgage assignments. According to a 60 Minutes profile from 2011, Green was selected to be the authorized bank officer because she had an easy-to-spell name.

Federal officials in Jacksonville believed that not only DocX, but their clients—the mortgage companies seeking false evidence—committed fraud by lacking a clear chain of title on millions of homes. And their superiors at FBI headquarters saw potential in the case, according to the FOIA documents. “If evidence collected shows intent to defraud investors by the real estate trusts, this matter has the potential to be a top ten Corporate Fraud case,” read one reply from the FBI’s Criminal Investigative Division that authorized additional resources to the Jacksonville office.

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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see http://thjf.org/2012/12/12/mortgage-backed-trusts-using-mortgage-assignments-from-docx-llc/

Article by Lynn Symoniak

On November 20, 2012, Lorraine O’Reilly Brown, the former president of mortgage-document mill, DocX, LLC, a subsidiary of Lender Processing Services, pleaded guilty in federal court in Jacksonville, Florida to conspiracy to commit mail fraud and wire fraud. DocX produced over one million mortgage assignments. These assignments were used in foreclosures across the country. Brown admitted that she knew that these assignments were being prepared to use in foreclosures.

In tens of thousands of cases, these fraudulent documents were used by mortgage-backed trusts to show that the trust acquired a mortgage. The information on these assignments was false – the trusts did not acquire the mortgages on the date set forth on these DocX Assignments.

Signatures were forged, notarizations were wrongly added to create an appearance of authenticity. Job titles were falsely claimed.

Which trusts used these phony DocX-prepared mortgage assignments? The trusts that used these Mortgage Assignments to foreclose include those listed below, with the name of the trustee following the name of the trust.

LPS has settled with Missouri for non-prosecution. The Missouri AG agreed to accept the assertion of LPS that it had no idea that all the criminal behavior was ever happening. They are soooooo sorry that they are paying $2 million to the state as a charitable contribution. Think I’m joking? read the article. This is an outrage and should be stopped and the AG should be kicked out of office.

George Zornick carries a rebuttal from Eric Schneiderman’s team on yesterday’s damaging expose of the securitization fraud working group. Here’s what it has to say:

• There are 50 staffers “across the country” working on the RMBS working group (the official title).
• DoJ has asked for $55 million for additional staffing.
• The five co-chairs of the working group meet formally weekly, and talk daily.
• There are no headquarters for the working group, but that’s because it’s spread across the country.
• There is no executive director.
• Activists still think the staffing level is too low.

If any of this looks familiar, it’s because it’s EXACTLY what Reuters and I reported a week ago. In other words, it was unnecessary. And it doesn’t contradict what the New York Daily News op-ed said yesterday, either. Like that op-ed, this confirms that there is no executive director and no headquarters for the working group, which sounds more like a central processing space for investigations that could have happened independently, at least at this point.

Meanwhile, if you want actual news, you can go to this very good story at MSNBC, revealing the truth that nobody wants to talk about: the inconvenient detail that the land title and property rights system that has served this country well for over 300 years has been irreparably broken by this gang of thieves at the leading banks.

In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week […]

The Wells Fargo worker, who first contacted msnbc.com via email in late January, told of a wide range of concerns about the foreclosure documents she processes. Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed.

“There was one file where they weren’t even past due and they were in foreclosure status,” the loan processor said. “They’re pushing these files and pushing these files….”

Five years into the worst housing collapse since the Great Depression, the foreclosure pipeline that is removing tens of thousands of families from their homes every month rests on a legal process that has been badly compromised by errors, misrepresentation and outright fraud, according to consumer attorneys, state attorneys general, federal investigators and state and federal judges.

I must confess that I don’t throw this in everyone’s face nearly enough. What is being described in this article is the product of a completely broken system. The low-level grunts are being forced to sign off on a quota of loan files every day, and push the paper through the pipeline. Veracity, or even knowledge of the underlying data in the files, is irrelevant. This is precisely what got us into this mess in the first place, and it’s still happening. And these grunts, making $30,000 a year, are given titles like “Vice President of Loan Documentation” to sign off on affidavits attesting to the loan files. That’s basically robo-signing. It’s still happening.

Check out this part about LPS:

Like many mortgage servicers, Wells Fargo relies on a company called Lender Processing Services to assemble some of the information used to foreclose on properties.

With each file they prepare, the bank’s document processors must swear “personal knowledge” the information in each affidavit was properly collected and is accurate and complete.

But they have no way of making good on that promise because they are not able to check whether LPS properly collected and processed the data, according to the document processor.

“We’re basically copying and pasting” information from the LPS system, she said. “It’s data entry. We just input (on the affidavit) what’s on that system. And that’s it. We don’t go back through system and look.”

You’re talking about massive, massive fraud. And this is what the state Attorneys General and the federal regulators gave up, in exchange for their non-investigatory investigation.

This story is familiar here, but not necessarily to the MSNBC.com audience. I applaud them for putting this long piece together that synthesizes a lot of the information that’s been out there for years. This is the real scandal here, a corrupted residential housing market that actually cannot be put back together.

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Editor’s Comment: So here we have one of the guys that was part of the team that overturned Glass-Steagal saying that their success led to the failure of our financial system. But then he says it is too late to change what we have done. It is not too late and if we are ever going to correct the financial system and hence the economy, we need to fix what we have done — separate the banks back into investment banks that take risks and commercial banks that are supposed to minimize risks. Instead we have a system where there is a virtually unlimited supply of other people’s money in the form of deposits and taxpayer bailouts that is the engine for leading what is left of the financial system into another ditch, this one deeper and worse.

Think about it. The banks are reporting record profits while the rest of us are experiencing record problems. That means that the banks are reporting gargantuan profits trading paper based upon economies that are in a nose-dive. How is that possible. We have less commerce (buying and selling) and more money being made by banks trading paper to each other. Or is this simply money laundering — bringing back and repatriating the money they stole in the mortgage meltdown and paying little or no tax?

Parsons Blames Glass-Steagall Repeal for Crisis

By Kim Chipman and Christine Harper

Richard Parsons, speaking two days after ending his 16-year tenure on the board of Citigroup Inc. (C) and a predecessor, said the financial crisis was partly caused by a regulatory change that permitted the company’s creation.

The 1999 repeal of the Glass-Steagall law that separated banks from investment banks and insurers made the business more complicated, Parsons said yesterday at a Rockefeller Foundation event in Washington. He served as chairman of Citigroup, the third-biggest U.S. bank by assets, from 2009 until handing off the role to Michael O’Neill at the April 17 annual meeting.

April 20 (Bloomberg) — Bloomberg’s Erik Schatzker and Stephanie Ruhle report that Richard Parsons, speaking two days after ending his 16-year tenure on the board of Citigroup Inc. and a predecessor, said the financial crisis was partly caused by a regulatory change that permitted the company’s creation. They speak on Bloomberg Television’s “Inside Track.” (Source: Bloomberg)

“To some extent what we saw in the 2007, 2008 crash was the result of the throwing off of Glass-Steagall,” Parsons, 64, said during a question-and-answer session. “Have we gotten our arms around it yet? I don’t think so because the financial- services sector moves so fast.”

The 1998 merger of Citicorp and Sanford I. Weill’s Travelers Group Inc. depended on the U.S. government overturning the portion of the Depression-era act that required banks to be separate from capital-markets businesses like Travelers’ Salomon Smith Barney Holdings Inc. Parsons, who was president of Time Warner Inc. (TWX) at the time, had been a member of the Citicorp board before joining the board of the newly created Citigroup.

“Why didn’t he do something about it when he had a chance to?” Mike Mayo, an analyst at CLSA in New York who rates Citigroup shares “underperform,” said in a phone interview. “He’s a couple days out the door and he’s publicly criticizing the ability to manage the company.”

‘Dynamic World’

Unlike John S. Reed, the former Citicorp CEO who said in 2009 that he regretted working to overturn Glass-Steagall, Parsons said he didn’t think that the barriers can be rebuilt.

“We are going to have to figure out how to manage in this new and dynamic world because there are good and sufficient business reasons for putting these things together,” Parsons said. “It’s just that the ability to manage what we have built isn’t up to our capacity to do it yet.”

Parsons didn’t refer to Citigroup specifically during his comments and Shannon Bell, a spokeswoman for the bank in New York, declined to comment. Mayo said Parsons’ comments show he views the New York-based bank as “too big to manage.”

“This gives more support to the new chairman to take more radical action,” said Mayo, whose book “Exile on Wall Street” was critical of Parsons and the management of banks including Citigroup. “Citigroup needs to be reduced in size whether that’s breaking up or additional asset sales or whatever it takes.”

‘Separate Houses’

Parsons said in a phone interview after the event that it was difficult to find executives who could run retail banks and investment banks in the U.S. because the two businesses had been separated by Glass-Steagall for about 60 years.

“One of the things we faced when we tried to find new leadership for Citi, there wasn’t anybody who had deep employment experience in both sides of what theretofore had been separate houses,” he said. Chief Executive Officer Vikram Pandit is trying to change that, Parsons said. “I think if you ask Vikram he’d say probably his biggest challenge long-term is developing the management.”

Banks are growing because corporations and other clients want them to, and management must meet the challenge, he said.

U.S. Bailout

“People have a sort of a notion that ‘well, we can decide that’s too big to manage,’” he said. “But it got that way because there was a market need and institutions find and follow the needs of the marketplace. So what we have to do is we have to learn how to improve our ability to manage it and manage it more effectively.”

Citigroup, which took the most government aid of any U.S. bank during the financial crisis, has lost 86 percent of its value in the past four years, twice as much as the 24-company KBW Bank Index. (BKX) Most shareholders voted this week against the bank’s compensation plan, which awarded Pandit about $15 million in total pay for 2011, when the shares fell 44 percent.

Shareholders’ views shouldn’t be “given the same level of weight” as those of the board and management, Parsons said. Companies “shouldn’t make the mistake of putting them in the driver’s seat.”

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Demand an Administrative Hearing

Very few people have asked for a review of their wrongful foreclosures. Maybe it is because we are all war-weary from this constant barrage of illegal activity from the banks. But there are avenues to travel, whether your foreclosure is past, present or even future. While the OCC review process has some restrictions announced, it nonetheless allies to all foreclosures whether they like it or not. They are the regulatory agency for certain types of banks and servicers, just like OTS, and the Federal Reserve. If one of their chartered and regulated members commits an atrocity, the agency is required by law to do something about it.

And one more thing. The OCC should be setting up review panels and administrative hearing processes because you can be sure that homeowners are not going to agree with the “review” that is conducted by the bank that is accused of committing the error, which is what the “review process” is all about. Why not ask a rapist to investigate whether he did it or if she was just asking for it?

This stuff is not just made up out of my head. It comes from the Administrative Procedures Act and its likeness in the federal, state and even local systems where any government agency is involved.

So if you are alleging wrongdoing in ANY foreclosure — past, present or future — you should be making your allegations. What do you allege? That is where the COMBO product linked next to my picture comes in and there are other people who do similar work although it is true that the title companies are trying their best to obscure the searches for title information. Getting a loan specific title analysis and a loan specific securitization analysis should provide you with enough information to allege wrongful foreclosure. Getting a Forensic Analysis and loan level analysis might also be helpful in rounding out the allegations.

Here are just a few items to get you going:

The debt wasn’t due

The debt wasn’t due to the party who foreclosed

The party who foreclosed misrepresented itself as the owner of the debt

The debt was paid in full by insurance, credit default swaps or federal bailouts

The monthly payment was paid by the servicer to the creditor (or the party they claim is the creditor) at the same time that the servicer was declaring a default to the borrower. If the creditor was getting paid, where is the default?

The credit bid was submitted by a party who was not a creditor and therefore should have paid cash at the auction

The auction was conducted by an employee or agent of the party seeking to foreclose

Payments were improperly applied or were not applied

Charges were illegal and unfair and were the reason for the foreclosure

You were tricked into foreclosure by the pretender lender’s agent telling you had to skip payments before you could be considered for modification. (known in the industry as dual tracking)

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I’ve been telling Canadians that there is considerable doubt as to whether the investment properties they are buying in the context of foreclosure are going to work out for them because of title defects. Some of them are listening and most see the deals as too good to be true. They are right — it is too good to be true, which means it isn’t true that the prices and title are just find, eh?

Here is the new disclaimer (see below). If you can find anything that protects anyone other than the title company then you are able to drill down further than we can. This disclaimer shows what we have been saying — the very use of the term “virtual” title tells us that there is no basis upon which the title agent or carrier will be held accountable or will pay anything if you buy property and take a policy from any of the major carriers.

Up until now it was standard practice in the industry that lawyers and lay people would rely upon the title report issued by the title company. Now they say it is for general information and you can’t rely on it. This means that virtually every buyer should have an attorney who is competent and has the resources to obtain and independent title report and is able to advise people holding or intending to hold title, mortgage or anything else. This gives them a license to insert or delete almost anything. The only way you can really know your chain of title is to go down to the county recorder’s office and examine the chain, one instrument at a time and to check for cross references where a parcel number or name might have been transposed.

What this also means is that anyone seeking to foreclose now must go through the same process and prove to the judge with a certified copy of the title registry that the mortgage is on there and that no satisfaction or other impediments to foreclosure are present. This is a new development and it therefore calls for new tactics and strategies.

Virtual Underwriter® is an underwriting tool. Stewart Title Guaranty Company and its affiliated underwriters (collectively “Stewart”) does not guarantee the accuracy, adequacy, or completeness of any content of Virtual Underwriter®, and you may not rely upon any such content. Only Stewart Issuing Offices may rely on Virtual Underwriter and only to issue Stewart insurance forms. Stewart makes no express or implied warranties with regard to Virtual Underwriter® and shall have no liability for any errors or omissions or for the results of the use of such material. You should not assume that Virtual Underwriter® is error-free or that it will be suitable for the particular purpose that you have in mind. Any material, forms, documents, policies, endorsements, annotations, notations, interpretations, or constructions included in Virtual Underwriter® are made available as a convenience only and should not be considered as altering or modifying the text of any matter to which they relate. Virtual Underwriter® should not be relied upon as a basis for interpreting the forms contained herein. Virtual Underwriter® is made available with the understanding that Stewart is not engaged in rendering legal, accounting, or other professional advice or services. If legal advice or services or other expert assistance is required, the services of a competent professional person should be sought. The material contained in Virtual Underwriter® is not a substitute for the advice of an attorney or other professional person. Preparation/facilitation of documents other than by an attorney may constitute the unauthorized practice of law.

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2008 Legal Memo at BKR Conference

Cautions Banks and Lawyers Against Lying About Ownership

A legal compendium of cases published by the American Bankruptcy Institute establishes a pattern of conduct by Ameriquest, Wells Fargo and Chase dating back before 2008 in which these and other banks have intentionally misrepresented themselves to the court as owners of the note, entitled to foreclose and seeking to lift the automatic stay in bankruptcy court under “color of title” arguments. The link to the entire article is below.

What I see is not just wrongful conduct in court but a continuous pattern of lying, fabricating, forging and cheating that has left millions of homeowners without possession of their rightful homes. The ONLY REMEDY in my opinion is to restore these homes to the bankruptcy estate and that the debtor’s be allowed to assert claims attacking the supposed mortgage liens that were based upon false identification of the lender, false and predatory figures used in borrowing and servicing and a large shroud thrown over the entire fictitious securitization process as a place to hide an illegal scheme to issue multiple securities in which the borrower was the issuer of the promissory note under false pretenses and the REMIC was carefully constructed to issue bogus mortgage bonds.

In both cases, the issuer and the investor were dealing with participants in the securitization chain who had no intention of allowing them to keep or recover their investment. In both cases, the instrument was a security that did NOT fall under the exemptions previously used to protect the banks. The borrower as issuer was induced to enter into a securities transaction in which he purchased a loan product under the false assumption created and promoted by the Banks that the real estate market never went down and would always go up, thus allaying the borrowers’ fear that the loan was not affordable. In fact that loan was not affordable and would violate the affordability guidelines in TILA and RESPA if it was classified as a residential mortgage loan. The REMIC that issued the bonds did so without any assets, and even though the disclosure was in the prospectus buried in parts where one would not be looking for that risk, that fact alone removes the REMIC issuance as a REMIC under the Internal Revenue Code, and removes the issuance of the mortgage bond from the cover of exemption under the 1998 Act.

We have all seen Wells Fargo, BOA, Chase, US Bank, Ameriquest and others banged repeatedly fro misrepresenting themselves in court as the owner of the loan when in fact they were not the owner of the loan, never loaned the money to begin with and never purchased the loan obligation from anyone because no money exchanged hands. Even if they tried, the only party who could sell or release claims to the receivable from the “borrower” (issuer) would have been the partnership or individuals or as a group pooled their money into leaky, fictitious entities created for the express purpose of deceiving the pension funds and other investors.

The bottom line is that when it suits them (when they want the property, in addition to the unearned insurance payments, proceeds of credit default swaps and proceeds from other credit enhancements and federal bailouts) these banks assert falsely that they are the creditor, claiming the losses that trigger payments to them rather than the investor. When it does not suit them, like when they abandon the property, or are subject to imposition of fees, sanctions or fines or attorney fees, then they finally fess up and state that they are not the owner of the loan in order to avoid paying appropriate costs, fines, fees, penalties and fees.

Here are some of the notable quotes from the piece written by Catherine V Eastwood, Esq., of Partridge, Snow and Hahn, LLP. At some point the lawyers must be subjected to the same sanctions knowing in the public domain that these practices exist as a pattern of conduct. see Consumer_Sept_2008_NE08_Messing_Mortgages_Cases

QUOTES FROM ARTICLE:

Make Sure Your Pleading Contains Accurate Information Regarding The Identity Of The Real Party In Interest
[AMERIQUEST FINED $250,000, LAW FIRM FINED $25,000, WELLS FARGO FINED $250,000 FOR A TOTAL OF $525,000] On April 25, 2008, Judge Rosenthal issued an memorandum of decision regarding an order to show cause why sanctions should not be imposed in the matter of Nosek v. Ameriquest Mortgage Company, 2008 Bankr. LEXIS 1251 (Bankr. D. Mass. 2008). Ameriquest had maintained throughout a prior adversary proceeding and bankruptcy case that it was the “holder” of the note and mortgage. When the debtor filed a second adversary proceeding requesting trustee process from two Chapter 13 Trustees to collect payment on the judgment issued in the prior case, Ameriquest argued that it was merely the servicer of the loans and that it was not the owner of the funds sought to be collected. The court noted that Ameriquest and its attorneys had made misrepresentations to the court throughout the prior proceedings regarding its status as noteholder. Wells Fargo, NA as Trustee for Amresco Residential Securities Corp. Mortgage Loan Trust, Series 1998-2 was the real holder of the note. The Court issued a Notice to Show Cause why sanctions should not be imposed

Make Sure Your Pleading Contains Accurate Financial Information or Fed. R. Bankr. P. 9011 May Be Imposed: Judge Bohm asked counsel why a motion from relief from stay was being withdrawn. The lawyer’s answer resulted in the judge issuing two show cause orders in In re Parsley, 2008 Bankr. LEXIS 593 (Bankr. S.D. Texas 2008). The real answer should have been that the motion for relief was filed in error on account of an erroneous payment history. Unfortunately, counsel misrepresented to the court that it was a “good motion” and that set off an explosion, leading to evidence of other misrepresentations…. Testimony also revealed that the payment histories were prepared by paralegals and were not reviewed by any attorneys. Countrywide did not review the loan histories either. No one was catching the errors under this system. Judge Bohm wrote “what kind of culture condones its lawyers lying to the court and then retreating to the office hoping that the Court will forget about the whole matter.”

[$75,000 Sanction against Law Firm] In an earlier matter, also in the Southern District of Texas, the Court sanctioned a law firm in the amount of $75,000 for filing an objection to plan and subsequent withdrawal of the objection that was deemed to be “gibberish.” In re Allen, 2007 Bankr. LEXIS 2063 (Bankr. S.D. Texas 2007). It was clear to the Court that the pleadings were not being reviewed by an attorney after being generated by a computer as the objection listed reasons that were completely unrelated or blatantly opposite of the contents of the Chapter 13 plan filed by the debtor.

[Chase required to pay legal fees of debtor] On April 10, 2008, Judge Morris, a bankruptcy court judge for the Southern District of New York, issued a decision in the case of In re Schuessler, 2008 Bankr. LEXIS 1000 (Bankr. S.D. NY. 2008) regarding an order to show cause why Chase Home Finance, LLC should not be sanctioned for submitting pleadings that were misleading and that had no factual support.

Standing Challenges: Make Sure The Company Bringing The Action Has The Legal Right To Do So

[RELIEF FROM STAY DENIED RETROACTIVELY ON DEBTOR’S MOTION] In re Schwartz, 366 BR 265 (Bankr. D. Mass. 2007) that parties who do not hold the note or mortgage and who do not service the mortgage do not have standing to pursue motions for relief or other actions arising out of the mortgage obligation. In Schwartz the creditor was seeking relief to pursue an eviction action following a foreclosure sale. The assignment of mortgage into the foreclosing mortgagee was executed four days after the foreclosure sale took place. The Court stated that while the term “mortgagee”, as used in M.G.L. c. 244 §1, “has been defined to include assignees of a mortgage, there is nothing to suggest that one who expects to receive the mortgage by assignment may undertake any foreclosure activity.” Id. at 269. The motion for relief was denied.

While not a bankruptcy court case, a United States District Court case worthy of inclusion in this section is In re Foreclosure Cases, 2007 WL 3232430 (N.D. Ohio 2007). The District Court issued an order covering numerous foreclosure cases that were pending in the state. The creditor was ordered by the Court to produce evidence that the named plaintiff was the holder and owner of the note and mortgage as of the date the foreclosure complaint was filed. The court dismissed the foreclosure complaints when the lenders were unable to produce the assignments.

How Many Times Can A Lender Continue a Foreclosure Sale?

In re Soderman, 2008 Bankr. LEXIS 384 (Bankr. D. Mass. 2008). In Soderman the court recited the “one-time” postponement blessing in order to seek relief from stay but that repeated continuances may be a violation of the automatic stay. The repeated continuances will be deemed a violation of the stay if the postponements are made in order to harass the debtor, gain an advantage for the creditor or renew the financial strain that led the debtor to file for bankruptcy protection. Id. One month after the decision in Soderman was released, Judge Hillman also ruled that repeated continuances of a foreclosure sale was a violation of the automatic stay. In re Lynn-Weaver, 2008 Bankr. LEXIS 1101 (Bankr. D. Mass 2008).

Challenging the Assessment of Mortgage Fees to a Loan and the United States Trustee’s Office’s Investigation of Countrywide Home Loans, Inc.

In an unprecedented move, Judge Agresti of the Pennsylvania Bankruptcy Court, in April 2008, approved the Justice Department’s further investigation of Countrywide due to widespread allegations that the lender is filing false or inaccurate claims, misapplying funds, assessing unreasonable fees to borrowers’ accounts or ignoring the discharge injunction and other court orders. Countrywide Homes Loans, Inc. f/k/a Countrywide Funding Corp., 2008 Bankr. LEXIS 1023 (Bankr. W.D. PA. 2008).
This matter was precipitated by a Standing Chapter 13 Trustee in Pennsylvania originally filing for sanctions against Countrywide Home Loans, Inc. due to her experience with the lender

The Pennsylvania matters have led the United States Trustee’s Office to file similar suits in Georgia1 and Ohio2 seeking to investigate the servicing practices of Countrywide. Various subpoenas have also been served by the United States Trustee’s office upon Countrywide in Florida regarding the assessment of fees on borrower’s accounts.

1 The United States Trustee’s Office filed a complaint on February 28, 2008 styled as Walton v. Countrywide Home Loans, Inc.,08-06092-mhm in the Northern District of Georgia. The related bankruptcy case is In re Atchley, 05- 79232-mhm. In Atchley, the homeowners eventually sold their home to avoid foreclosure but believe the payoff amount cited by Countrywide contained excessive fees and that Countrywide continued to accept trustee payments after the loan paid off.
2 The United States Trustee’s Office filed a complaint on February 28, 2008 styled as Fokkena v. Countrywide Homes Loans, Inc., 08-05031-mss in the Northern District of Ohio. The related bankruptcy case is In re O’Neal, 07- 51027. In O’Neal, Countrywide filed a proof of claim and objection to plan when it had already accepted a short sale on the property prior to the bankruptcy filing.

ALL LENDERS ARE FAIR GAME

[Forensic Audits Suggested — $10,000 damages, $12,350 Legal Fees, Wells Fargo sanctioned $5000] in the matter of In re Dorothy Stewart Chase, Docket 07-11113, Chapter 13 (Bankr. E.D. LA 2008), Judge Magner issued a 49 page decision on April 10, 2008 which ordered Wells Fargo to audit every proof of claim it filed in the district since April 13, 2007 and to provide a complete loan history on every account. If the audits reveal additional concerns, the judge reserved the right to appoint experts to do forensic accountings at the expense of Wells Fargo. She also ruled that Wells Fargo was negligent in the loan servicing of Ms. Chase’s loan and assessed damages of $10,000, legal fees of $12,350 and sanctioned Wells Fargo $5,000 for filing a consent order that did not reflect the agreement of the parties and for filing erroneous proofs of claim.

[Wells sanctioned $67,202.45] The decision in Chase was on the heels of Judge Magner’s earlier decision in In re Jones, 2007 Bankr. LEXIS 2984 (Bankr. E.D. LA. 2007). In Jones, Judge Magner sanctioned Wells Fargo $67,202.45 for violating the order of confirmation and the automatic stay by improperly assessing the debtor’s loan with fees in the amount of $16,852.01 and diverting payments made by the Chapter 13 trustee and the Debtor to satisfy fees that had not been authorized by the Court. The judge stated that the Jones case would provide guidance in the post-petition administration of home mortgage loans to a degree that, until this decision issued, had been lacking in the industry.

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Editor’s Comment; The fact they he is being forced to testify is a major breakthrough the wall silence used by the banks and servicers. BY this article I am asking for people to review the court file, get the pleadings and memorandums and send them to me at neilFgarfield@hotmail.com. Everyone should be paying attention to this case, and everyone should be reading everything. The insurer is making the case for the borrowers at the the same time as they are making the case for recovery of money paid by them under false pretenses to the wrong parties, screwing both the investors and the borrowers.

(Reuters) – A New York judge has ruled that Bank of America (BAC.N) CEO Brian Moynihan must testify in a lawsuit brought by bond insurer MBIA Inc.(MBI.N) which claims the bank fraudulently induced it to insure risky mortgage-backed securities.

The judge said Moynihan could provide relevant testimony in the case due to his position as CEO, former president of investment banking and the fact that he oversaw the process of integrating Countrywide into Bank of America.

Bank of America acquired mortgage lender Countrywide in July 2008. MBIA filed a Countrywide later that year. In 2009, MBIA claimed Bank of America was liable for Countrywide’s conduct.

Bank of America, the second-largest U.S. bank by assets, is fighting several legal cases following the global financial crisis and had sought to block MBIA efforts for Moynihan to give evidence.

MBIA was once the largest U.S. municipal bond insurer. It announced a restructuring in 2009 after incurring large losses insuring mortgage debt.

Bank of America had asked New York Supreme Court Justice Eileen Bransten to rule that Moynihan did not need to testify, arguing that MBIA was seeking his deposition only to harass the bank and that Moynihan had no unique knowledge about the case.

But the judge on Wednesday denied the request, according to court papers made public on Thursday.

“The knowledge Moynihan gained as part of the (Countrywide) Steering Committee is unique, and it is material and necessary to MBIA’s successor liability claim,” the judge said.

Moynihan was involved in “high-level decisions regarding the Countrywide transaction” and his testimony will not duplicate that of lower-level employees, she said.

MBIA declined to comment and Bank of America did not immediately respond to requests for comment.

The cases is MBIA Insurance Corp v. Countrywide Home Loans Inc et al, New York State Supreme Court, New York County, No. 602825/2008.

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Editor’s Comment: We had an interesting exchange in a civil, almost charming meeting with the Arizona Secretary of State last night at Darrell Blomberg’s Tuesday night meeting. He has the AZ AG coming in a couple of weeks.

One thing that came out is that the oath of the notary is missing in many cases and there were some people who thought this might be the magic bullet that would bring down the entire foreclosure process. I don’t know how this got started but the responses from the Secretary and his manager of business affairs were mostly correct — although they point to serious deficiencies in the system and training of the people.

The oath and the bond are usually on the same page. That it is not recorded anywhere is flimsy at best and even if correct would be a source of annoyance to a judge rather than convincing him that the mortgage origination was defective and the foreclosure wrongful.Proving the notary to have been incorrectly affixed might accomplish a right to have the mortgage or deed of trust removed from the title records — but it does NOT invalidate the document itself. There is no magic bullet.

I again say: there is no magic bullet, and there is no paper defect that will discharge a debt. Debts are discharged by payment or waiver of payment (and waived could be involuntary, like in bankruptcy). By concentrating upon the possibility of a defect in the process of record-keeping on the oath of office of a judge or notary, you are essentially admitting the debt, the default and the right to collect and even foreclose, although your intent is otherwise.

The attestation by the notary has nothing to do with the validity of the contents of the document. It serves only to say that a person appeared before the notary and fulfilled the statutory requirements by identifying themselves. The notary is merely attesting to the fact that this is what happened. Someone appeared, gave a drivers license etc., and signed in front of the notary. That is the fullest extent of the attestation of the notary and the power of the notary.

In Arizona, any attestation by the notary that includes corroboration that the person whose signature is being notarized is in fact that person or has a particular relationship with a particular company is void to the extent that the attestation of the notary includes assurance of the signor’s official position or representative powers.

California has a similar provision but allows notaries — if they actually know — to attest to the official capacity of the signor. But California law has an important caveat. Any attestation as to the powers, rights and obligations of the signor cannot be used and is of no effect if it is being used outside the state. So if you are in Arizona and the notary was in California and included an attestation that the signor was vice president of MERS, the part about the signor being a VP of MERS counts for nothing.

The secretary stepped in immediately when his manager tried to say that any decision by the office of the secretary of state is final and cannot be reviewed. However, as he pointed out, the finding of an administrative agency is presumptively true unless you can prove otherwise. That is why the OCC decrees etc. should be viewed as valuable to homeowners because there have already been admissions and findings that the foreclosures were wrongful, and in some studies (San Francisco). Those findings after investigations are also entitled to a presumption of validity and throws the burden of proof onto the the pretender lender IF you show that the bad practices cited by the agencies show up in your particular case.

It is disturbing that (a) a state official second only to the secretary of state himself actually believed that she had supreme authority that was never subject to review. And (b) although the secretary affirmed his believe that his office was a record keeper and not an enforcement arm of the executive branch, I think that is a contradiction in terms. The purpose of the executive branch of government is to enforce the law. If a filing is required with the Secretary of State providing information about the activities of a limited partnership along with the fees payable to the State of Arizona, it is a mistake, in my opinion, to believe that such an agency lacks the right to prosecute those who fail to register, do business in the state and don’t pay their fees.

After decades of practice in administrative law all over the country, I believe I have discovered a mistaken impression that is often found amongst state departments, both as to their powers and their obligations to enforce those powers. I think a lawsuit in mandamus against the office of Secretary of State requiring them to use the Administrative Procedures Act and participate in hearings conducted by administrative hearings judges who are objective and unbiased, may well be necessary unless the Secretary rethinks his position and does so on his own.

This might be particularly important to the State of Arizona and other states since the REMIC pools appear to be either general or limited partnerships and not Trusts as they are described in the PSA and prospectus. This ought to be at least tested.

But whether the restrictive power of the secretary of state extends only to limited partnerships and not corporations and other business entities ( division that is peculiar at best) the major point is still the same. A foreign entity or person holding money in their hands, solicited applicants for loans and then closed transactions for those loans within the state of Arizona and with respect to an interest or potential interest in real property located strictly within the state of Arizona, violated state law and must suffer the consequences.

If they want to say that these leads to an unfair or inequitable result, they must allege and prove that they will lose money by applying the law and that means proving that they funded the loan, bought it or otherwise advanced real money where money exchanged hands. At this point everyone who knows the logistics here knows that there is not one party, group or person that can prove that case, which is why the rejection of modifications is so ridiculous and born of pure arrogance.

The real lender or creditor is now admitted to be an out of state group or entity of some kind that never registered in the state, never paid the fees, and never gave any required information about the group or entity. Perhaps the Secretary of state should be more intrigued when he realizes that hundreds of thousands of such transactions occurred in the State of Arizona over the last 12 years and they continue to be conducting business activity and legal activity in the state all without the required registration. The exemptions from registration do not apply.

Under normal rules of engagement, the party failing to properly register is subject to fees, fines and penalties for doing business without registration and may neither bring any legal claim or defend against one in the absence of the proper registration. So whether it is the office of the Secretary of State or some other department that somehow does not fall under the authority of the secretary of state (a peculiar circumstance at best) the State is (a) missing out on hundreds of millions of dollars in revenue from out-of-state carpet baggers and (b) missing its chance to stop the foreclosures and even return the wrongfully foreclosed homes to their rightful owners.

So my question to the Secretary of State is this: As the putative lieutenant governor of the State who might be seeking higher office (the governor’s mansion), which would you rather do — run with the backing of back s tabbing bankers who have already shown their willingness and desire to lie, forge documents and otherwise cheat the state’s citizens out of the right to possession of their own homes AFTER payment has been received in full — or would you rather ride the crest of anti-bank sentiment that can be found lurking in almost every voter regardless of the status of the ir mortgage or living arrangements? My bet is that the politician who seeks higher office or to maintain incumbency, would best be served by leading a populist revolt against the major out of state banks and a movement toward local in-state banks that had nothing to do with the mortgage mess created by false claims of securitization.

My second piece of advice is that the head of any agency having anything to do with regulation of business entities , banking and lending had best brush off their old copy of the Administrative Procedure Act because in my view there is right to bring a complaint against the agency that cannot be denied. And without having procedures and facilities for administrative hearings, complainants cannot fulfill the requirement of exhaustion of administrative remedies. That allegation alone in state or federal court could bring a mountain of constitutional issues crashing upon the shoulders of agency heads who thought they were immune from some issues.

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Occupy Homes Protest Forces Delay of Sheriff Sale
By Ty Moore

US Bank buckles under pressure, delaying sale of veteran John Vinje’s home until May 29th

After a week of escalating pressure demanding US Bank postpone the sheriff’s sale of John and Lucinda Vinje’s home, Occupy Homes won another 11th hour victory today. John Vinje led a contingent of 50 Occupy Homes MN supporters into the Hennepin County Sheriff’s Office Civil Division where the sale was to take place at 11:00am this morning.

Speeches, chants, and song filled the marbled hallways in the ground floor of city hall. No potential buyers were seen entering the courtroom the entire time, and just after 11:30am it was announced that US Bank had delayed the sale to May 29th. Following the victory, John said: “This shows that the power is now with the people, and not with large, monolithic corporations, like US Bank.

Homeowners throughout Minnesota facing foreclosure, facing sheriff’s sales, should get together with their community and demand a postponement and renegotiation. They should get connected with Occupy Homes because we can save homes throughout the state of Minnesota when we all work together.” Today’s action followed a week of escalating pressure on US Bank, including a national call-in campaign aimed to VP Tom Joyce, and a march on US Bank CEO Richard Davis’ mansion on April 7th. Ty Moore, an organizer with Occupy Homes explained: “We’ve got the banks scrambling already, but this fight is just beginning. John’s victory, following Monique and Bobby’s victories, is sending a message. Minnesota homeowners aren’t going to leave their homes quietly and in shame anymore. It’s the banks and CEOs like Richard Davis who should be ashamed!”

Occupy Homes MN achieved national media attention after winning Bobby Hull’s foreclosed home back after US Bank bought his property at a sheriff sale, and repeatedly delaying the eviction of Monique White, who also received her original mortgage through US Bank. John and Lucinda Vinje are among a growing number of homeowners joining together through Occupy Homes to fight back against the unjust and illegal banking practices behind the foreclosure crisis. John and Lucinda Vinje bought their home in 2008, the first house either of them had ever owned. John is an Air Force veteran now working as a security guard, and Lucinda has worked a government job for ten years.

But when financial difficulties caused them to fall behind on payments by just two months, US Bank refused their request to repay their arrears in installments and immediately began foreclosure proceedings. Meanwhile, Lucinda has been forced into “medical retirement” due to a chronic condition, adding financial strain on the family. If US Bank would renegotiate their mortgage to current market value as the Vinje’s request, they could afford the payments. After six months of delays, in March US Bank offered them a measly $97 less on their monthly payments. Both John and Lucinda have worked their entire lives, but now stand to lose the only home they have ever owned.

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EDITOR’S ANALYSIS: As this article demonstrates in sampling some counties in the Northeast, there is no indication that the prices of homes are stabilizing nor that there is any prospect of anything but further reductions in prices of homes. The reason is simple. Price is not the same as value. The value of the homes are still at least 15% lower than the current prices. Thus it is not difficult to recognize that when the market catches up with the current reality, the prices will come down to meet the actual values.

That is exactly how in 2007 I was able to call with precision, the collapse of the housing market, the collapse of the stock market and the freezing of the credit markets — and the resulting effect on some brokerage houses who neither loaned any money nor bought any of the bogus mortgage bonds they were selling, but rather created fictitious losses that were carefully manipulated to extract taxpayer money for toxic assets that could have been protected and improved but for the narrative created and controlled by the banks and servicers.

Brad Keiser deserves some credit here for predicting the actual order and timing of the crash of each investment house. All he did was put pen to paper and figure out how many time each investment firm was leveraged on the same bond pools. He was exactly right. You can see it on the DVD package we offer that describes securitization.

The more pernicious part of this process is that the capital sucked out of the economy by the banks (who are now reporting “profits” of high magnitude) this money was tucked away and NOT used to finance start-ups, expansion or even maintenance of existing business. Just as the clear policy of the banks and service is to foreclose on residential property, they have followed the path of starving new and existing capital for the sole purpose of favoring competition and financing the purchase of what is left after these companies die, laying off hundreds of thousands of workers.

As for the workers, they are still out there or giving up on finding a job that will pay anything for their household expenses after deductions of work-related expenses. Hence median income has no current prospect of stabilizing or increasing under the current circumstances. In fact median income continues to decline. A decline in median income means that there will be further decline in home values which in turns means further decline in home prices.

Add to this deadly cycle the fact that title to the “foreclosed” properties is very much in doubt, at best, and probably fatally defective at worst, and you have a very slow moving, downward market in residential home sales and financing for at least the next ten years. My projection is that overall, there will be at least another 30% drop in prices over the next 10 years. This will be offset by inflation averaging at least 3% per year under the best of circumstances. We have now more than tripled our currency volume and we still can’t get out of this mess. Follow the example of Iceland and watch what happens — huge fiscal stimulus to the economy, the banks taking the hit for their own misdeeds, the each household getting enough relief that they can start purchasing things besides food.

Follow the examples of our own common law history and the homes that were the subject of wrongful foreclosure are re turned to their rightful owners and if someone wants to make a claim for collection or even foreclosure they still can — if they can prove each and every essential element of their case.

And it seems clear that nothing can stop this drag on the entire U.S. economy except the application of law. BUT the application law goes both ways. Having truth on your side makes no difference at all if you don’t present in the right way, at the right time and prove it. And THAT is the reason for the many negative positions taken by Judges. If you go in and concede that you know owe the money, you agree you failed (not refused) to make scheduled payments, and that you defaulted on the loan, the Judge really has very little choice except granting whatever motions the banks and servicers present. You have conceded your case away.

This is why you need title, securitization and forensic reporting from reliable third parties whose credentials are indisputable in court. Take these issues to your accountants and see what they think. You may come up with some surprising answers.

The point you need to know and believe is that the money went down one path and the documents went down an entirely different path so the banks could oversell the loans and the bets on those loans. This leaves the banks and servicers in a vulnerable position but it is a complex set of facts. You have about 30 seconds to get the Judge’s attention and 5 minutes to make your point. After that, expect nothing.

But the single-most important ingredient in the recovery is the resistance and fear of the borrowers who feel like deadbeats, and do not appreciate how they were used as pawns in getting tons of money from investors that far exceeded the amount of their loans. There is a new diagnosis created by the authors of the book, Legal Abuse Syndrome. You all ought to look it up, and order it. They hit the nail on the head. Without the outrage shown in Iceland, our country’s finances will never be fixed.

The Truth About The ‘Housing Bottom’: Home Prices Across The Northeast Are In Total Freefall

Keith Jurow | Apr. 16, 2012, 9:00 AM
For nearly two years, I have been warning in my articles posted on BUSINESS INSIDER that there is no housing bottom in sight. I’ve been correct.

Yet one analyst after another has been proclaiming that the housing bottom is finally here. This is nonsense!

Many of these “experts” have skin in the game and hope to lure you back into the market. They base their assumptions on the fact that housing prices seem to be falling more slowly. They’re not. Take a look at these shocking numbers I uncovered in the last two weeks:

These are real, raw numbers, not an index like Case-Shiller. They come from the largest family-owned brokerage firm in the northeast — Raveis and Co. whose reputation is impeccable. I spent several days reviewing the terrific raveis.com search tool and found similar price declines in more than 150 towns and cities.

Sales volume was way down in most towns in the northeast. To my surprise, inventories are up substantially from a year earlier. All that talk last fall about shrinking MLS inventories is history. Listings are soaring in most towns.

Some people I speak with are skeptical about these numbers. Check them for yourself if you think I’m making them up. Go to the raveis.com homepage and the drop-down menu for “Housing Data.” Then hit the link to “View local housing data” and this will take you to their search page where you can see the latest sales and price statistics for towns in seven northeast states. You’ll be as shocked as I was.

Here is my warning: Prices are crumbling and homeowners have perhaps six months to decide what to do. I strongly suspect that a year from now will be too late.

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“Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.”

It’s Not a Theory

When it was Wrong from the Beginning:

The Highest Form of Economic Stimulus is to

Correct Debt Balances

Editor’s Comment: Iceland has taken the obvious common sense approach — fueled by an outraged population — and ended up creating the largest fiscal stimulus of any developed country without spending one cent of taxpayer money and without printing any “quantitative easing” currency debasing their currency. By the way more than 90 bankers there are headed for jail. Sounds like magic? That is what U.S. Banks would have you believe. But it is true as you can see from the Bloomberg article below.

The problem has been that the populations cannot pay the interest or the principal on debts that were so exotic in their construction that Alan Greenspan confesses he never understood them, let alone the borrowers. Borrowers were forced to rely on misrepresentations by the Banks and their agents as to the value of the loan, the value of the collateral and the viability of the transaction.

People in Iceland rioted in the streets throwing rocks at politicians and government buildings — not because they owed the money but because they knew that (a) they were victims of bank fraud and (b) the banks owed them money, not the other way around.

Under pressure from the government, the banks have decreased household debt by around 25% so far. The banks have not collapsed, financial system is in good shape and Iceland leads the developed world in economic recovery. The risk fell back on the Banks, the perpetrators of this mess.

The relief was and is being shared by two victims — the households tricked into buying these debt packages and the investors who pooled their money to fund the exotic debt structures. The claims of bank losses have been ignored as being not (and never were) economically real.

That’s what happens when the populations rises up and says “NO!” Similar programs here even on a small scale have corroborated the Iceland experience. And yet we continue to support the banks whom we believe are too big to fail. Following the Iceland example — now in its 3rd year — would provide many trillions of dollars in fiscal stimulus to our economy, launch the economy into a full recovery and clear up the budget deficits of local, state and federal government agencies.

It’s a choice. What do you choose?

Icelandic Anger Brings Debt Forgiveness in Best Recovery Story

By Omar R. Valdimarsson

Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

Icelandic Anger Brings Debt Forgiveness

A cyclist passes an Icelandic national flag hanging in a popular shopping street in Reykjavik, Iceland.

A cyclist passes an Icelandic national flag hanging in a popular shopping street in Reykjavik, Iceland. Photographer: Paul Taggart/Bloomberg

“You could safely say that Iceland holds the world record in household debt relief,” said Lars Christensen, chief emerging markets economist at Danske Bank A/S in Copenhagen. “Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that.”

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.

The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.

Crisis Lessons

“The lesson to be learned from Iceland’s crisis is that if other countries think it’s necessary to write down debts, they should look at how successful the 110 percent agreement was here,” said Thorolfur Matthiasson, an economics professor at the University of Iceland in Reykjavik, in an interview. “It’s the broadest agreement that’s been undertaken.”

Without the relief, homeowners would have buckled under the weight of their loans after the ratio of debt to incomes surged to 240 percent in 2008, Matthiasson said.

Iceland’s $13 billion economy, which shrank 6.7 percent in 2009, grew 2.9 percent last year and will expand 2.4 percent this year and next, the Paris-based OECD estimates. The euro area will grow 0.2 percent this year and the OECD area will expand 1.6 percent, according to November estimates.

Housing, measured as a subcomponent in the consumer price index, is now only about 3 percent below values in September 2008, just before the collapse. Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”

People Vs Markets

Iceland’s approach to dealing with the meltdown has put the needs of its population ahead of the markets at every turn.

Once it became clear back in October 2008 that the island’s banks were beyond saving, the government stepped in, ring-fenced the domestic accounts, and left international creditors in the lurch. The central bank imposed capital controls to halt the ensuing sell-off of the krona and new state-controlled banks were created from the remnants of the lenders that failed.

Activists say the banks should go even further in their debt relief. Andrea J. Olafsdottir, chairman of the Icelandic Homes Coalition, said she doubts the numbers provided by the banks are reliable.

“There are indications that some of the financial institutions in question haven’t lost a penny with the measures that they’ve undertaken,” she said.

Fresh Demands

According to Kristjan Kristjansson, a spokesman for Landsbankinn hf, the amount written off by the banks is probably larger than the 196.4 billion kronur ($1.6 billion) that the Financial Services Association estimates, since that figure only includes debt relief required by the courts or the government.

“There are still a lot of people facing difficulties; at the same time there are a lot of people doing fine,” Kristjansson said. “It’s nearly impossible to say when enough is enough; alongside every measure that is taken, there are fresh demands for further action.”

As a precursor to the global Occupy Wall Street movement and austerity protests across Europe, Icelanders took to the streets after the economic collapse in 2008. Protests escalated in early 2009, forcing police to use teargas to disperse crowds throwing rocks at parliament and the offices of then Prime Minister Geir Haarde. Parliament is still deciding whether to press ahead with an indictment that was brought against him in September 2009 for his role in the crisis.

A new coalition, led by Social Democrat Prime Minister Johanna Sigurdardottir, was voted into office in early 2009. The authorities are now investigating most of the main protagonists of the banking meltdown.

Legal Aftermath

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

The U.S. subprime crisis sent home prices plunging 33 percent from a 2006 peak. While households there don’t face the same degree of debt relief as that pushed through in Iceland, President Barack Obama this month proposed plans to expand loan modifications, including some principal reductions.

According to Christensen at Danske Bank, “the bottom line is that if households are insolvent, then the banks just have to go along with it, regardless of the interests of the banks.”